Create VHD (Virtual Hard Disk) On Windows 7/Vista/XP Using Disk2vhd
As a system administrator, you may like to make your job easier by creating VHD files of a Windows installation, so it can be imported into any virtual machine, such as Microsoft Virtual PC or Microsoft Hyper-V virtual machines (VMs). Disk2vhd, a free utility given by Sysinternals, lets you do that easily, with the click of a button.
VHD or Virtual Hard Disk is virtual machine disk format supported by Microsoft. Disk2vhd creates a VHD by taking a snapshot of your PC using the built-in Windows Volume Snapshot capability, available in versions starting from Windows XP onwards.
With Disk2vhd you can simply select the drives for which you like to create the virtual disk, choose a filename for the VHD file and then simply hit the ‘Create’ button. Disk2vhd can also be used for backup and recovery of Windows systems. After creating a VHD file, you may want to check out this article on how to mount and unmount the disk from the right click context menu.

Works with Windows 7, Windows Vista, Windows XP (SP2 or later).
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